Will Malaysia Airlines Go Out Of Business?

What's next for Malaysia Airlines? First, flight MH370 carrying 227 passengers from Kuala Lumpur mysteriously disappeared en route to Beijing, the reasons for which are still unknown. Then last week, flight MH17, on its way to Kuala Lumpur from Amsterdam, was shot out of the sky over Ukraine, raining fire and carnage over the countryside. Now, Bloomberg Businessweekreports that airline executives are "focusing on finding a way to save the company," and one of the options includes bankruptcy.

The unprecedented string of tragedies casts an eerie light over the airline. "In the current form, I firmly believe Malaysia Airlines won’t be able to survive," Mohshin Aziz, an analyst at Malayan Banking, told Bloomberg Television earlier this week. "They will largely exhaust all their capital and won't have any money left to continue flying by the middle of next year."

The airline was already dealing with its share of adversity even before last week's attack. CNN Moneyreports that even before MH370 disappeared, "a difficult business climate forced the airline into the red for three years in a row," leading to a loss of $1.3 billion over that time period.

The airline is expected to pay the families of victims of both crashes an initial payment of $150,000 each, per international law.

Despite the news cycle's recent glut of scary plane crashes, the statistics show that flying is safer than it has ever been, thanks to new engineering and navigation technologies being implemented designed to keep flyers safe—2013 had one of the lowest accident rates in history.

Add New Comment

2Comments

We flew with them before the tragedies and it was definitely a bad experience with poor service. On the same trip we flew out with Korean Airlines which used to have a terrible safety record until they changed their game and that was worlds apart